Needed: a Churchill

ByJOSEPH C. HARSCHNovember 17, 1987

WE are now in the third week of the so-called ``budget summit'' in Washington, with nothing yet accomplished and no action expectable which approaches what must be done if the United States and the Western trading community are to be spared grave economic problems. What is needed is a new Winston Churchill, with his ability to articulate a crisis and hence cause people to accept the sacrifices that are needed to remedy it.

No one in high place in Washington is admitting a crisis. Partly this may be because the leaders at the White House and on Capitol Hill are equally incapable of realizing the gravity and the danger of the situation.

Of course it is not as obvious a crisis as Britain faced on May 10 in 1940 when Adolf Hitler's superbly trained and prepared armed forces smashed into the Netherlands and Belgium and headed for France. That event destroyed all illusions about Hitler's intentions.

The plunge of the stock markets Oct. 19, in the US and around the world, was the kind of event which, like the invasion of Holland and Belgium in 1940, strips away illusions and tells everyone that something is out of order and badly needs fixing.

But instead of recognizing a grave situation, identifying it and proceeding to take the necessary remedial measures, the President and the leaders in Congress have been locked in a struggle over who is to be immunized against remedial measures.

That is what the wrangling is all about.

President Reagan is still resisting the idea of undoing any part of his income tax cuts. So long as he can hold that line, the upper-middle and highest income classes are immunized.

Instead of higher income taxes, he wants to approach a balanced budget by cutting back on entitlement programs. One important pending proposal would be a narrow limit on cost-of-living adjustments in social security (COLAs). Some have even dared to whisper that all upward adjustments be banned.

Congress would, if it could, immunize all welfare beneficiaries and all pensioners (military and social) from the necessary remedies.

But the problem is too grave for immunizations. The US is in a period of declining prosperity. It is not paying its own way. It has been living off enormous foreign borrowings. The outside world is withdrawing its money from dollars.

There are two essential facts behind the wrangling in Washington. One is that the dollar cannot be restored to soundness only by going back to higher income taxes on the rich. There are simply not enough of the rich, no matter how visible the big spenders sometimes seem to be.

But it is equally true that it is politically impossible to produce a situation in which social-security beneficiaries and pensioners and welfare recipients believe that they are being asked to carry the whole load.

The rich are going to have to be taxed more heavily, if only to make it politically possible to cut back on entitlements. It is obvious that there will be no persuasive movement toward a balanced budget without a curb on entitlements.

But the rich are not going to give up their tax cuts or the less rich give up their entitlements unless everyone first recognizes that the US has been enjoying a spending spree on borrowed money and borrowed time and that the day of reckoning has arrived.

If we had a Winston Churchill in Washington today who understood economics (the real Winston Churchill was less brilliant in this department than at war), he would be telling us exactly what the situation is and asserting that the time has come for all classes to accept the peacetime equivalent of ``blood, toil, tears and sweat.'' It would translate into a reduced scale of living for all.